The Financial Industry Regulatory Authority Inc. of New York and Washington has established a special process for resolving action rate securities cases in arbitration.
The new process, announced Aug. 7 by Finra, is similar to a pilot program announced earlier by the self-regulatory organization for other securities arbitration cases.
Qualifying investors will have the option of getting their claims heard by a three-person panel of arbitrators, none of whom would be affiliated with a firm that recently sold auction rate securities.
The new process is an outgrowth of the one developed by Finra for the Securities and Exchange Commission’s settlement with Citigroup Inc. of New York, Finra said in a press release.
“In light of the settlement with Citigroup, Finra believes it is a matter of fairness that all investors with auction rate securities claims, regardless of the firm involved in the dispute, be handled in this manner,” Linda Fienberg, president of Finra Dispute Resolution, said in a press release.
To date, more than 170 cases involving auction rate securities have been filed in Finra’s dispute resolution forum, Finra said.
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